EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504519
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Wattyl Australia applied for a TCO in respect of certain Paint Fillers on 18 April 2005.
Instrument
TCO No 0504519 was made on 16 September 2005. It declares that those certain Paint Fillers are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is 0%.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0504519 is taken to have come into force on 18 April 2005.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) that allow for reduced rates of duty on certain goods. The Act was introduced to address the need for flexible customs duty arrangements that could promote trade and economic benefits by reducing costs for importers of specific goods. The Tariff Concession Instrument No. 0504519, made on 16 September 2005, is an example of such an order that was designed to provide relief to the importer of certain Paint Fillers by reducing their duty rate from 5% to 0%. This was achieved through a process where the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia. The policy objective behind this concession is to encourage the import of these goods by making them more competitively priced in the Australian market, thereby supporting the broader economic interests of the country.
Scope and Application
The Tariff Concession Instrument No. 0504519 pertains to the application of the Customs Act 1901, specifically targeting the concession of customs duty rates on certain goods. This instrument applies to Wattyl Australia’s application for a Tariff Concession Order (TCO) in respect of certain Paint Fillers, which was made on 18 April 2005. The instrument is applicable to the goods identified in the application, and it is contingent upon the determination by the Chief Executive Officer of Customs (CEO) that no substitutable goods were produced in Australia at the time of the application. The geographic reach of this Act is national, as it operates under the federal jurisdiction of Australia’s Customs Act 1901. The instrument effectively lowers the duty rate from the general rate of 5% to 0% for the specified Paint Fillers, provided that no submissions against the concession were received by the CEO after the publication of the application in the Gazette. The instrument does not impose any liabilities on any person and does not affect the rights of any individual or entity as at the date of registration.
Key Provisions
The primary sections of this Tariff Concession Instrument (TCO) are section 269C, which outlines the core criteria that an application must meet to be considered valid, and section 269P(3), which mandates the creation of a TCO when those criteria are satisfied. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) requires the Chief Executive Officer of Customs (CEO) to issue a written order, the TCO, when satisfied that the application meets these criteria. In this case, the TCO, number 0504519, applies a zero percent duty rate to certain Paint Fillers, which previously carried a general duty rate of 5%, effective from the date the application was lodged, 18 April 2005.
The obligations imposed by the Act on the parties involved include the requirement for Wattyl Australia to demonstrate that the goods in question do not have substitutable alternatives produced in Australia, thereby satisfying the core criteria set out in section 269C. The CEO, upon receiving a valid application, must review the application against these criteria, make a determination, and issue a TCO if appropriate, as per section 269P(3). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO, as stipulated in subsection 269K(1). In this instance, the CEO did not receive any submissions opposing the TCO.
The Act includes provisions for penalties and consequences in the event of non-compliance or breaches. While the specific penalties for breaches are not detailed in the explanatory statement, it is known that the Act generally allows for both civil and criminal penalties for non-compliance. Civil penalties may include fines, while criminal penalties could involve imprisonment or additional fines, depending on the nature and severity of the breach. These penalties serve to enforce compliance with the Act and the TCOs made under it, ensuring that the intended tariff concessions are applied correctly and fairly.